During 2003, the FDIC completed evaluations of programs designed to achieve the strategic
objectives set forth in the Insurance Program area of the FDICís 2001-2006 Strategic Plan.

The program evaluation of each strategic objective included a list of issues to be evaluated,
background context of the evaluation, analysis of programs and actions to achieve the objective,
evaluation methodology, and findings. The following section highlights the issues evaluated
and summarizes the results of this evaluation.

Do customers of failed insured depository institutions have timely access to financial services?

Findings

The FDIC has appropriate procedures in place to ensure that customers have timely access
to insured funds and financial services. If an institution failure occurs on a Friday, FDICís target
for access to insured funds by customers is one business day. If a failure occurs on any other
day of the week, the target is two business days. When an institution fails, the FDIC fulfills
its role as insurer by either facilitating the transfer of the institutionís insured deposits to an
assuming institution or by paying insured depositors directly. If an institution failure occurs,
the FDIC ensures its customers timely access to financial services, such as automated teller
machines, safe deposit boxes and wire services. From January 2003 to December 2003, there
were three bank failures. In all cases, an acquiring institution assumed insured deposits and
re-opened for business the Monday morning immediately following the Friday failure.

The FDIC has a wide array of materials available to provide timely financial information to
customers of failed institutions. These materials are available through the FDIC Web site
(www.fdic.gov) with an Electronic Deposit Insurance Estimator (EDIE) and the FDICís toll free
number (877-ASK-FDIC). The FDICís diligence in promoting financial education is also evident
in its outreach seminars, workshops, and its award-winning Money Smart program. All of these
initiatives provide methods for consumers to have timely access to financial education.

Strategic
Objective

The FDIC promptly identifies and responds to potential risks to the
insurance funds.

Issues evaluated

How does the FDIC identify and respond to potential risks to the insurance funds?

Findings

The FDIC monitors the condition of the financial services industry and projects insured financial
institution failures as well as associated resolution costs. Risks posed by large insured institutions
are assessed through two supervisory programs: the Dedicated Examiner program, which covers
the largest eight depository institutions, and the Large Insured Depository Institution (LIDI)
program, which covers remaining institutions with over $10 billion in assets. The results of these
risk assessments are communicated to FDIC regional and divisional management. The Risk
Analysis Center receives the summary data and analysis results of the LIDI process, which
is then provided to the Financial Risk and National Risk Committees for their purposes.

Also, the FDIC identifies and follows up on concerns referred for examination or other action
through an Off-site Review Program.

The FDIC disseminates data and analyses on current issues and risks affecting the banking
industry to bankers, supervisors, stakeholders and the public. Analyses are included in regular
publications available on the FDICís Web site.

Strategic
Objective

The deposit insurance funds and system remain viable.

Issues evaluated

What actions has the FDIC taken to improve the deposit insurance system?

Findings

The FDIC continues to pursue enactment of deposit insurance reform legislation. Under the
reform proposals, the BIF and SAIF will be merged, and the FDICís ability to manage the
combined fund and price premiums properly to reflect risk will improve.

During 2003, the FDIC developed a study on the future of banking. The study focused on
underlying trends in the economy and the banking industry, and their implications for different
sectors of the industry and for bank regulators in the future.

The FDIC established a Center for Financial Research (CFR) to encourage and support innovative
research on topics that are important to the FDICís role as deposit insurer and bank supervisor.
The CFR will explore key developments affecting the banking industry, risk measurement and
management methods, regulatory policy and related topics of interest to the FDIC and the larger
financial community.

Copies of the complete Insurance Program Evaluation Report may be obtained from: